Coinbase, a major U.S.-based cryptocurrency exchange, has resumed new user signups in India. The move follows a two-year freeze on onboarding Indian users that began in 2022.
This signals a renewed interest by the company to grow its presence in one of the world’s largest internet markets. Coinbase also announced it is planning to allow fiat deposits and withdrawals in India by 2026.
India is home to millions of potential cryptocurrency users. Coinbase’s re-entry offers more competition and options for users in a market largely dominated by local exchanges such as WazirX and CoinDCX.
However, launching a fiat on-ramp will require cooperation with India’s financial system, which has been cautious about crypto services.
Background
- Coinbase first entered the Indian market in 2022.
- It quickly halted new user registrations after facing issues with the United Payments Interface (UPI) system.
- The National Payments Corporation of India (NPCI) had publicly denied authorizing crypto transactions via UPI.
- Following that, Coinbase scaled back its India operations and paused hiring in the country.
New Developments
Coinbase now allows Indian residents to download its app and complete Know-Your-Customer (KYC) checks. However, they can only trade crypto-to-crypto pairs, as fiat support remains unavailable.
The company stated that it is taking a long-term approach to India. In its official announcement, Coinbase said it aims to build a trusted platform for the local Web3 community.
India continues to tax crypto trades at 30% on gains and has a 1% tax deducted at source (TDS) on crypto transactions above a certain amount. These policies have affected trading volumes across local and international platforms.
Regulatory and Market Impact
While India has not banned cryptocurrencies, it does not yet have a full regulatory framework. The Indian government is working with international organizations to create a standard approach, including cooperation with the G20.
Coinbase’s cautious re-entry suggests the company is waiting for more regulatory clarity before fully launching its services in India.
Recent Related Developments
- In March 2024, NPCI reiterated that no crypto exchange is currently authorized to access UPI services.
- India included crypto assets in its anti-money laundering laws in early 2023.
- CoinDCX, an Indian crypto exchange, recently reported a drop in trading volumes due to tax concerns.
What’s Next
Coinbase plans to offer fiat currency services by 2026 if regulatory conditions allow. Its renewed focus on India indicates that the company sees long-term potential in the region.
Sources
- Reuters – “Coinbase resumes user registrations in India”
- Coinbase Blog – “Reinvesting in India: A new chapter”
- Economic Times – “NPCI not authorizing crypto UPI payments”
“`
